Oil Prices Fall as Hopes of Middle East De-escalation Ease Supply Concerns

News 10:48 AM - 2026-10-26

Oil prices.

Oil prices fell by around 2% in trading on Monday, 26 October 2026, giving up some of last week’s gains amid optimism over a possible de-escalation of tensions in the Middle East.

At 05:08 GMT, Brent crude futures for December 2026 delivery were down 1.88% at $114.52 a barrel.

Meanwhile, US West Texas Intermediate (WTI) crude futures for December delivery fell by 2.17% to $101.03 a barrel, according to real-time data.

Crude prices retreated from near six-month highs amid hopes of easing tensions between the United States and Iran. However, ongoing attacks in Saudi Arabia, a major oil producer, have continued to fuel concerns among investors.

Oil prices closed more than 3% higher on Friday, 23 October, amid fears of potential disruptions to energy supplies from the Middle East following Houthi attacks in Saudi Arabia and heightened security tensions in the Arabian Gulf.

Vandana Hari, founder of oil market analysis firm Vanda Insights, said concerns over renewed military hostilities in the Middle East — the main driver of last week’s price increases — had eased on Monday morning, although the calm could prove temporary.

Hari added that US President Donald Trump had not ruled out market expectations that strikes against Iran could follow the US midterm elections on 3 November. She expects volatility to remain high, with risks continuing to lean towards further price increases.

Meanwhile, Saudi Arabia and Singapore announced that Saudi Aramco would begin storing crude oil in Singapore in the second half of 2027. The move is intended to strengthen the resilience of Saudi Arabia’s regional supply chain.

Priyanka Sachdeva, head of market analysis at Phillip Nova, said that although supply risks surrounding the Strait of Hormuz remained significant, the latest price decline appeared to reflect market position adjustments and risk management rather than any meaningful improvement in the underlying supply situation.

Fatih Birol, executive director of the International Energy Agency (IEA), also highlighted concerns over energy supplies, saying he did not expect global energy markets to return to their pre-conflict state by 2027.


PUKMEDIA